Short-Term Martial Law in South Korea: Potential Implications for the Country’s Gaming Industry

At around 23:00 on December 3, 2024, South Korean President Yoon Suk Yeol declared martial law in the country, the first time since 1980. However, the declaration did not last long as members of the National Assembly voted 190–0 against it. and President Yoon lifted the restrictions in the early hours of December 4 after a cabinet meeting. In this post, we examine the impact of the declaration and its political impact on the Korean gaming industry.

According to Niko Partners’ 2024 Market Model Update Report, Korean gaming revenue is expected to grow 1.5% year-over-year to $11 billion following higher-than-expected industry growth. Although we initially expected 2025 to be a stagnant year for the Korean gaming industry, the imposition of martial law and the drama that followed may slightly sway the economic situation in a more downward direction. After the declaration of martial law, the Korean won immediately fell to its lowest value against the US dollar since 2022 – but we note that the won later stabilized to levels similar to those after the US Presidential election.

We also note that key stocks on the KOSPI fell more than 7% on average, but this was expected, and prices then stabilized to an average decline of less than 2%. Regarding the gaming industry in this country, Niko predicts a contraction compared to our initial estimate of stagnant growth caused solely by exchange rate movements and investment concerns. Although the declaration was withdrawn overnight, the action has caused increased uncertainty among investors due to the potential for continued political instability.

Interestingly, we believe that because media and political gatherings were tightly controlled while martial law was in effect, online gaming could be a safe place for people to discuss developments, especially as they preferred to stay at home to avoid unrest. We also note that the stock prices of several gaming companies such as Kakao Games, Webzen, Wemade, and Mgame even rose by an average of around 1% as the market stabilized after the lifting of the martial law declaration on Tuesday. This shows that the rapid turnaround of events and the role of games as a medium of entertainment can be seen positively even in times of turmoil. Unfortunately, we can only measure the impact after gaming companies release their upcoming annual earnings reports.

With the situation moving away from domestic unrest, the impact of martial law is expected to only slightly harm short-term gaming market growth projections. Niko will continue to monitor the situation in Korea. Subscribe to us Value Added News Analysis (VANA) and read our upcoming market report on Asia and MENA markets for further Niko analysis.

About Niko’s Coverage in South Korea

South Korea is one of the leading video game markets in East Asia tracked by Niko Partners for more than a decade. Dive deeper into the market with us East Asia Gaming Market Report Series with the newly updated market model. Get regular credit checks in the industry through Niko’s VANA-Valuenow come in NikoIQour online intelligence dashboard. We have too custom research & consulting services that will help you answer more specific questions and develop a strategic plan, tailored to your needs.